Zuckerman Spaeder Clients Sue Cigna for Routinely Overcharging Patients by Ignoring MultiPlan Discount Contracts

Health insurer Cigna is improperly refusing to apply contractually obligated discounts for medical services, according to a first amended complaint in a class action lawsuit by Zuckerman Spaeder LLP. In the complaint, which adds state law claims by the American Medical Association, the Medical Society of New Jersey, and Washington State Medical Association to the ERISA claims previously asserted by three individuals, the associations allege that Cigna’s actions cause physicians to be underpaid and damage the patient-physician relationship. 

The three patient plaintiffs were all enrolled in Cigna-administered health plans offered by their employers and received care from physicians who are part of the MultiPlan Network. As part of this network, these physicians agreed not to hold their patients liable for the difference between the original billed charges and the MultiPlan rate. Cigna agreed to pay the MultiPlan rate, as reflected by the written terms of Cigna’s plans and the placement of the MultiPlan logo on the insurance cards it issues to patients. 

Plaintiffs allege, however, that Cigna frequently refuses to do so and instead pays a much lower rate, even though the physician has not agreed to accept that lower amount as payment in full. To make matters worse, Cigna then falsely tells the patient that the physician agreed to the lower rate, according to the complaint. “Our clients allege that Cigna contractually agreed to apply certain rates, promised in plan documents to honor those rates, and then flatly ignored its contracts and promises,” said Zuckerman Spaeder partner Andrew N. Goldfarb. “It did so to serve its own financial interests at the significant expense of patients and physicians.” 

The association plaintiffs allege that Cigna is engaged in a deceptive business practice. Further, as explained in the amended complaint, “By ignoring the MultiPlan contracts, and then lying on EOBs to the insureds about their liability for the unpaid portion of the billed charges, Cigna, without justification or excuse, interferes with and undermines the professional and business relationship between patients and physicians.”

In discussing the case, Jack Resneck Jr., M.D., President, American Medical Association, further stated: “Patients and physicians have a right to expect health insurers to uphold their promise to provide fair and accurate payment for medical services. But alleged misconduct by Cigna has allowed the insurer’s economic self-interest to be prioritized ahead of their promises to physicians in the MultiPlan Network and their patients. The AMA and other physician organizations allege that Cigna’s misconduct is riddled with conflicts of interest and manipulations that routinely shortchanged payments to MultiPlan Network physicians and interfered with the patient-physician relationship by ignoring the MultiPlan contracts and making incorrect statements to patients about their liability for the unpaid portion of the billed charges. By joining Stewart v. Cigna as a plaintiff, the AMA hopes to shed light on Cigna’s misconduct and create remedies so that patients and physicians can look forward to getting what they are promised.”

The case number is 3:22-cv-00769 in the U.S. District Court for the District of Connecticut. Co-counsel in the action are Barclay Damon LLP and Cohen Howard, LLP. A copy of the complaint can be found here

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